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Cross Country Bank, a credit card lender targeting poor credit, or “subprime”, customers was ordered to pay almost $9 million by a New York judge for deceptive, fraudulent and illegal practices. Eight million dollars will be in fines, while $900,000 will go toward refunds for New Yorkers who carried the Cross Country Bank credit cards. New York Attorney General Eliot Spitzer filed a lawsuit in 2003 alleging that Cross Country Bank used deceptive credit card solicitations to target consumers with poor credit records, offering credit lines of up to $2,500 but giving the vast majority of consumers only about $400 in credit — most of which was immediately applied to fees imposed by the bank, such as annual, application and monthly maintenance fees.

As part of his lawsuit, Spitzer also alleged that after driving their cardholders into delinquency, Cross Country’s affiliate, Applied Credit Services, used abusive and illegal collection techniques to harass cardholders into making a payment, including repeated phone calls, calling cardholders at work, using insulting and/or obscene language, and making improper threats. In addition, Spitzer’s office alleged that Applied Card Systems debited payments from cardholders? accounts without authorization and misrepresented payoff amounts. Cross Country Bank has changed its name to Applied Card Bank.

 

Published 01/26/06 (Modified 05/07/12)